It’s no secret that car insurance can be expensive for newly-qualified drivers. That’s why many of us start out by being added to our parents’ car insurance policy as a ‘named driver’.
Being a named driver means that you can drive the vehicle and enjoy the same levels of protection as the main driver, but with the acknowledgement that you won’t be putting in the majority of the miles covered.
Adding a named driver
If you want to add your child to your policy, then you will need to provide the insurer with all of the relevant details about them, such as their age, address, occupation and driving history.
When adding another driver to the policy, it’s up to you whether to do this for the rest of the term of the policy or over a short-term basis, which is usually for up to 90 days.
One additional consideration is driving abroad. Depending on the insurer, a named driver may only receive third party cover when driving outside the UK. As a result, if they are planning to get behind the wheel while abroad then you may need to think about extending that so that they have comprehensive cover.
How much will it cost?
There are a couple of different costs to take into account when adding a young person to your car insurance policy.
For starters, there’s likely to be a modest admin charge for adding a new driver. This will vary depending on the insurer but is likely to be around £30.
But there will likely be an impact on the cost of your premium overall too. In all likelihood, your premium will become more expensive. When an insurer calculates the price of your premium, they are trying to understand the risk of various factors, including who’s driving the vehicle. And unfortunately the simple truth is that one in four (23%) young drivers are involved in an accident within the first couple of years of passing their test, according to Brake, the road safety charity. This is why young drivers’ policies are usually more costly.
Nonetheless, it’s likely that adding your child to your existing car insurance policy will work out cheaper than if they arrange their own standalone policy. However, there are some factors to take into consideration before you do choose this option.
The no-claims bonus
One important consideration here is that if your child is a named driver on the policy, then they may not have the opportunity to build up their own no-claims bonus.
This means that when they do decide to get a policy in their own name, it could end up being more expensive, though some insurers will take into account any years spent as a named driver.
Should the named driver be at fault in an accident and need to make a claim, this will affect your no-claims bonus, even if you were not involved.
The dangers of ‘fronting’
Another thing all parents should be very aware of is a practice known as ‘fronting’.
This is where parents take out a car insurance policy with themselves as the main driver, even though their child - who is simply a named driver on the policy - will be doing most or even all of the driving.
Parents can be tempted into doing this as a way of reducing the cost of the premium.
Insurers take a host of different factors into account when determining policy prices, but they rely on people answering questions honestly. Trying to disguise who is the main driver is actually a form of fraud.
And while some people believe it may help them get a lower initial premium, if they are caught there can be serious consequences. For starters, the policy will likely be invalidated but, as this is a criminal offence, in extreme cases some of those involved could face prosecution.
This would then make securing insurance, as well as other financial products like mortgages and credit cards, much harder and more expensive in the future.
There are some practical steps you can take to help reduce an inexperienced driver’s insurance premium. For example, limiting their mileage allowance or purchasing a car that is less performance oriented can help. Indeed, with the numbers of young drivers involved in accidents, it makes sense to ensure they have a car that isn’t fast and has a high safety rating, for both financial reasons and for their wellbeing.